Home > Car manufacturing "completely defeated" by cheap, fuel-efficient imports

Car manufacturing "completely defeated" by cheap, fuel-efficient imports

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Market research firm IBISWorld has updated its Motor Vehicle Manufacturing in Australia report, and has pointed to the influence of decreased tariffs and shifting consumer preferences driven by fuel efficiency.

The company’s analyst David Whytcross said production had “plummeted” due to the shifts towards fuel-efficient vehicles.

The decrease in tariffs on imported vehicles from 10 per cent to 5 per cent in 2010 and the historically high Australian dollar in recent years was coupled with the changed consumer demand.

“Local motor vehicle manufacturers have traditionally manufactured large cars,” noted IBISWorld.

The company predicted that revenues for the sector would fall at a 1.5 per cent compound annual growth rate for the five years to 2014/2015.

Three companies manufacturing passenger cars – Toyota Australia, Ford Australia, and General Motors Holden – will all end their local manufacturing operations by 2018.

“The industry will remain, however, due to truck manufacturing operations and small amounts of engine manufacturing,” said Whytcross.

Image: 3AW

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